Nuveen Preferred and Income Term Fund Announces Final Results of Tender Offer and Increase in Distribution Rate

Rhea-AI Summary

Nuveen Preferred and Income Term Fund (NYSE: JPI) announced the final results of its tender offer, where 8,672,542 common shares (38% of outstanding) were tendered at $20.0081 per share. As a result, the fund will implement several changes:

1. Elimination of the term structure effective August 19, 2024
2. Name change to "Nuveen Preferred Securities & Income Opportunities Fund"
3. 50% waiver of net management fees for the first year
4. Increase in monthly distribution rate by 69.4% to $0.1660 per share

These changes aim to enhance shareholder value and support secondary market trading. The fund may distribute from sources other than net investment income, potentially including return of capital.

Positive

• Successful completion of tender offer with 38% of shares tendered
• Elimination of term structure, providing more flexibility
• 50% waiver of net management fees for the first year
• 69.4% increase in monthly distribution rate to $0.1660 per share

Negative

• Potential erosion of NAV if distributions include return of capital
• Distributions may come from sources other than net investment income

Insights

Financial Analyst

The tender offer's completion and subsequent changes are significant developments for JPI. The 38% share repurchase at NAV demonstrates strong shareholder interest and could potentially boost the fund's per-share metrics. The 50% management fee waiver for the first year is a positive for expense ratios. However, the substantial 69.4% increase in monthly distribution raises concerns. While attractive for income-seekers, it may not be sustainable long-term, especially if it includes return of capital, potentially eroding NAV. Investors should closely monitor distribution sources and NAV trends in the coming months.

Market Research Analyst

The fund's transformation from a term structure to an open-ended format is a strategic shift in response to market dynamics. This change, coupled with the significant distribution increase, appears aimed at enhancing the fund's appeal and potentially narrowing any discount to NAV. However, the sustainability of the new distribution rate is questionable. The mention of possible return of capital in distributions suggests a potential yield-focused strategy that may not align with long-term value preservation. Investors should weigh the attractive yield against the risk of NAV erosion and consider the fund's new positioning in the broader preferred securities market landscape.

NEW YORK--(BUSINESS WIRE)-- Nuveen Preferred and Income Term Fund (NYSE: JPI) announced the final results of a tender offer.

As previously announced, the fund conducted a tender offer allowing shareholders to offer up to 100% of their common shares for repurchase for cash at a price per share equal to 100% of the net asset value (NAV) per share as of the close of ordinary trading on the New York Stock Exchange on the expiration date of the tender offer. The tender offer expired on August 14, 2024 at 5:00 p.m. Eastern time.

In the tender offer, 8,672,542 common shares were tendered, representing approximately 38% of the fund’s common shares outstanding. Properly tendered shares will be repurchased as promptly as practicable at $20.0081 per share, which was the NAV of the fund as of the close of ordinary trading on the New York Stock Exchange on the expiration date, August 14, 2024. Shareholders of the fund who have questions regarding the tender offer should contact Georgeson, LLC, the information agent for the fund’s tender offer, at (866) 679-9573.

As a result of the successful completion of the tender offer, the proposals described in the fund’s proxy statement dated February 26, 2024 and in the offer to purchase relating to the tender offer will be implemented. In particular:

• The fund’s declaration of trust will be amended effective August 19, 2024 to eliminate the term structure of the fund. The amendment was previously approved by the fund’s shareholders at the fund’s annual meeting held on April 12, 2024, as adjourned to July 17, 2024.
• The fund’s name will change to “Nuveen Preferred Securities & Income Opportunities Fund” effective August 19, 2024 (the fund’s common shares will continue to trade on the New York Stock Exchange under the ticker JPI).
• Nuveen Fund Advisors, LLC, the investment adviser to the fund, will waive 50% of the fund’s net management fees beginning August 19, 2024 and continuing over the first year following the elimination of the term structure.

In addition, the Board of Trustees of the fund has approved an increase in the fund’s monthly distribution rate as outlined below. The distribution change is intended to help support secondary market trading in fund shares and enhance shareholder value. It is anticipated that to maintain the declared distribution rate, the fund may make distributions from sources other than net investment income. In this regard, the source of regular distributions may include a return of capital.

The following dates apply to today’s monthly distribution declaration for the fund:

Record Date	September 13, 2024
Ex-Dividend Date	September 13, 2024
Payable Date	October 1, 2024

			Monthly Distribution Per Share
Ticker	Exchange	Fund Name	Amount	Change From Previous Month	Percentage Increase
JPI	NYSE	Nuveen Preferred and Income Term Fund	$0.1660	$0.0680	69.4%

The Fund intends to distribute all or substantially all of its net investment income each year through its regular monthly distribution and to distribute realized capital gains at least annually. In addition, in any monthly period, to maintain its declared per common share distribution amount, the Fund may distribute more or less than its net investment income during the period. In the event the Fund distributes more than its net investment income during any yearly period, such distributions may also include realized gains and/or a return of capital. To the extent that a distribution includes a return of capital the NAV per share may erode. If a distribution includes anything other than net investment income, the fund provides a notice of the best estimate of its distribution sources at the time of the distribution which may be viewed at www.nuveen.com/CEFdistributions. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ 1099-DIV forms after the end of the year.

Nuveen is a leading sponsor of closed-end funds (CEFs) with $54 billion of assets under management across 45 CEFs as of 30 June 2024. The funds offer exposure to a broad range of asset classes and are designed for income-focused investors seeking regular distributions. Nuveen has more than 35 years of experience managing CEFs.

About Nuveen

Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $1.2 trillion in assets under management as of 30 June 2024 and operations in 27 countries. Its investment specialists offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.

Nuveen Securities, LLC, member FINRA and SIPC.

The information contained on the Nuveen website is not a part of this press release.

Certain statements made in this release are forward-looking statements. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. These include, but are not limited to:

• market developments;
• legal and regulatory developments; and
• other additional risks and uncertainties.

You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Nuveen and the closed-end funds managed by Nuveen and its affiliates undertake no responsibility to update publicly or revise any forward-looking statements.

The annual and semi-annual reports and other regulatory filings of Nuveen closed-end funds with the Securities and Exchange Commission (“SEC”) are accessible on the SEC’s web site at www.sec.gov and on Nuveen’s web site at www.nuveen.com/cef and may discuss the above-mentioned or other factors that affect Nuveen closed-end funds.

EPS-3796863PR-E0824W

View source version on businesswire.com: https://www.businesswire.com/news/home/20240819744995/en/

For more information, please visit Nuveen’s CEF homepage www.nuveen.com/closed-end-funds or contact:

Financial Professionals:

800-752-8700

Investors:

800-257-8787

Media:

media-inquiries@nuveen.com

Source: Nuveen

FAQ

What was the final tender price for JPI shares in the tender offer?

The final tender price for JPI shares in the tender offer was $20.0081 per share, which was the NAV of the fund as of August 14, 2024.

How will JPI's distribution rate change after the tender offer?

JPI's monthly distribution rate will increase by 69.4% to $0.1660 per share, effective from the September 13, 2024 record date.

What changes will be implemented for JPI following the tender offer?

JPI will eliminate its term structure, change its name to 'Nuveen Preferred Securities & Income Opportunities Fund', waive 50% of net management fees for the first year, and increase its monthly distribution rate.

When will the changes to JPI take effect?

The changes to JPI, including the elimination of term structure and name change, will take effect on August 19, 2024.